If a Firm Has an ROA of 8%, a Debt/equity

question 52

Multiple Choice

If a firm has an ROA of 8%, a debt/equity ratio of 0.5, its ROE is ________.

• A)4%
• B)6%
• C)8%
• D)12%

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Definitions:

Continuous Random Variable

A variable that can take an infinite number of real values within a specific range.

Normal Curve

A symmetrical bell-shaped graph that represents the distribution of data in which most values cluster around a mean value.

Standard Normal Probability Distribution

A normal distribution with a mean of zero and a standard deviation of one.

Probability Density Function

A function that describes the relative likelihood for a random variable to take on a given value.